The power of

Cognitive Commerce

for Banking

March , 2016

The mega-trends that are creating opportunities … and unprecedented challenges for the banking industry

Ever-changing

RegulationsEmboldened regulators are

ushering in a new era of

increased government oversight

and capital requirements; Regular

stress tests

Rapidly Changing

Technology Digital pervasiveness; Deriving

value from data; Real-time

information; Computing resources

as a service; Privacy and security

Evolving

DemographicsDigitally astute, social; Younger

consumers entering the financial

system; A shift in wealth to

younger generations and

emerging markets

Volatile Global Economic

environmentGeopolitical instability & tension

within the Middle-East; Prolonged

global stagnation; Sluggish

Eurozone recovery

Social ImperativesSocietal and government

pressure to bring under-banked

and unbanked populations into

the formal financial system

Challenge to Brand

Loyalty Hard to build trust (quick to lose);

Non-banks of real consequence;

Coexistence with telcos, e-

commerce; Profit pressure on

transaction services

© 2016 IBM2

Banks must embrace change, find new ways to understand, engage and fulfill demand

INDUSTRY CHALLENGES

Customers are savvy, digitally astute, mobile, social and expect pervasive access to services. They demand customized experiences and offerings at a lower price points

Entrance of non traditional competition offering better value and experiences

Unbundling of the banking value chain to unlock value and scale; integration of pieces of banking value chain with other value chains like e-commerce

Increasing complexity in operations, operating models, technology architecture which often do not reflect business realities. A diverse and complicated ecosystem of platforms, vendors and partners that needs to be managed

Emerging regulations demand granular and frequent demonstration of governance and control increasing the burden of compliance

Increasing challenges in managing operational and financial risk

Increasing rate and complexity of fraud Banks’ integral role in the financial ecosystem coupled with a

rapidly evolving technology environment exposes them to more security breaches and attacks

Customers

Disruption

Security & Fraud

Compliance & Risk

Complexityand Cost

Create a customer-focused enterprise

Optimize risk and compliance

Drive agility and operational efficiency

INDUSTRY IMPERATIVES

TECHNOLOGY IMPERATIVES

Advanced analytics cognitive and engagement capabilities

Digitization across the enterprise

Componentization and interoperability

On demand availability of IT resources

Risk and security intelligence

© 2016 IBM3

Your digital intelligence is your competitive advantage

Data that’s

inaccessible

Data outside

your firewall

Data you

possess ++

Unstructured and darkStructured and active

Customer records

Transactional systems

Predictive models

Institutional expertise

Operational systems

News

Events

Geospatial

Weather

Social media

Images

Video

Written material

Internet of Things

Other unstructured data

© 2016 IBM4

Only cognitive unlocks the potential in all data

Think of all that has been

accomplished using only

a fraction of the available

data

Unlock the

possibilities. What answers lie

in the 88% that

is dark?1By the year 2020, about

1.7 MB of new information

will be created every

second, for every human

being on the planet.2

SOURCES cited in notes

© 2016 IBM5

For Operations

Improve loan decisioning with

faster approvals; assisting in

managing complex compliance

requirements

For Sales & Service

Representatives

Cognitive Assisted

Sales & Service to provide

expert advice

For Marketers

Analyze Trends

Real-time Personalized

Engagement

So you can make better decisions by embracing the power of Cognitive Commerce in Banking

© 2016 IBM6

Master the art of the possible…

Deliver personalized messages and offers through intuitive always on engagement

Deliver at the just right moment seamlessly across all channels

Driven by insights to pivot between aggregate trends and individual behaviors

…Deeper human engagement

© 2016 IBM7

Master the art of the possible…

Direct-to-consumer cognitive virtual agents that serve, guide, & advise on web or mobile

Advisor-facing applications that provide agents & advisors with guidance for customers

Employee-facing applications that aid knowledge workers in execution of business processes, and compliance to regulations

…Cognitive processes and operations

© 2016 IBM8

A large financial services organization in the USWith the ability to interpret complex, nuanced regulatory language, cognitive computing is transforming

compliance for one of the oldest financial institutions in the US.

72%Accuracy achieved in the POC,

showing the solution as a viable

alternative to human expertise Thousandsof hours in time savings

expected through the elimination

of manual regulatory evaluations

© 2016 IBM9

Sources: IBM case studies

A leading financial

services group in Asia

helps relationship

managers in providing

higher quality, bespoke

investment advice to

customers

A large European bank

uses cognitive to gain

insights into institutional

client behavior to predict

future transactions

One of the world’s largest

banks employ cognitive to

help mass market

customers at call centers

select higher value

investments

Cognitive capabilities are helping banks to provide better service, discover

insights and to take better and quick decisions to improve business processes

© 2016 IBM10

But, we can help you also address today’s concerns through a holistic approach to engagement

© 2016 IBM11

Marketing Solutions for Banks

Digital

Marketing

Lead

Management

Customer

Experience

Analytics

Journey

Design

Omni-Channel

Marketing

Real-Time

Personalization

IBM Marketing Cloud IBM Marketing Software

© 2016 IBM12

BanorteMakes it personal across all channels to drive loyalty – with IBM Global Services and all powered by

IBM Marketing and IBM Customer Analytics Solutions.

40% 20%Improvement in

operating

efficiencies

Return on

equity 200MUSD expected bottom

line benefit in the first

24 months

© 2016 IBM13

Customer Analytics Solutions for banks

Social

Analytics

Predictive

Analytics

Customer

Experience

Analytics

Cloud and Software Solutions

© 2016 IBM14

Dollar BankDrives customer satisfaction by truly understanding their customer journey’s across channels -- all

powered by IBM Customer Analytics solutions.

25SReduction in

average contact

call center times 30%Fewer call escalations,

increasing customer

satisfaction

© 2016 IBM15

B2B Integration Solutions for banks

B2B

Integration

Managed

File

Transfer

Cloud and Software Solutions

© 2016 IBM16

Rabobank NetherlandsRabobank is using IBM B2B Integration to manage growth of their trading partners cost-effectively and

securely exchange files such as ordering cash for ATMs.

66%400%Faster to

onboard new

partners

increase in

trading-partners

over 3 years

© 2016 IBM17

Payments Solutions for Banks

Commercial

Payments

Cloud and Software Solutions

Retail

Payments

© 2016 IBM18

ScotiabankImplemented an integrated-payments-service system that supports ongoing growth -- with IBM Business

Consulting Services and powered by IBM Payments solution.

350%Increase

in online-report

volumes 75%Reduction in

new customer

setup time

© 2016 IBM19

Sources: Nucleus Research Provided for illustrative purposes and is not intended to be a guarantee of future growth rates

or market opportunity.; Fortune 500 Rankings, and IBM Analysis, and reports from IBM VAN GIODE

350,000+Global trading entities

connected

10 of 10Top Global Banks are

IBM Clients

110 millionMessages a day are

transferred via IBM

Payments

11% savingsCompanies report an

average with IBM

Procurement solutions

#1 Bankingtechnology vendor in the

FinTech Ranking

IBM Commerce delivers nearly 15x ROI for every dollar spent

30%of all SWIFT messages

are transfered via IBM

Payments

© 2016 IBM20

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